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Why Denbury Remains a Buy

The following video is part of our “Motley Fool Conversations” series, in which analyst John Reeves and advisor David Meier discuss topics across the investing world.

Denbury CEO Phil Rykhoek recently outlined the oil company’s current and future plans. And John and David believe the stock is still a buy after considering those plans. Denbury is the second largest tertiary recovery oil company behind Occidental Petroleum. It floods older oil fields with CO2 to extract oil left behind. It’s a great business model, as long as you own massive quantities of CO2, like Denbury does. The company also owns property in the Bakken. Unlike big Bakken players such as Continental and EOG Resources, Denbury is using those cash flows to fund its future tertiary production growth in the Rockies. Denbury is a great selection for John and David’s real-money portfolio. It’s domestically focused, has a differentiated position, and can grow for years. And the best part is, investors can pick up shares cheaply today.

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